Used Car Prices Could Go Up By $1000 Thanks To Sandy

Used-car prices are expected to rise $200 to $1,000 nationwide
because Superstorm Sandy wiped out as many as 250,000 new and
used vehicles.

Buyers already are starting to show up at dealers to replace the
100,000 to 250,000 vehicles that the National Automobile Dealers
Association estimates were lost to the storm that devastated New
York's Staten Island and coastal New Jersey.

"This weekend was extremely busy," says Brian Benstock, general
manager of Paragon Honda in the Queens borough of New York.

He estimates half of the buyers over the weekend were those
looking for replacements for storm-damaged vehicles.

Edmunds.com, a car buyers' research website, says prices could
rise $700 to $1,000 a car because supplies are limited.

Economists for two of the nation's largest wholesale auto
auctions say they expect the sudden burst of demand could raise
used-car prices by up to 2(PERCENT) -- about $200 on a $10,000
car -- above normal.

Although prices will be higher, many buyers may not notice.
Before the storm, prices had been drifting down as they typically
do in the fall, Kontos says.

The average price of the recent-model used cars sold to dealers
at wholesale auctions was $9,742 in October, down 1.4(PERCENT)
from a year ago.

The storm's devastation "is going to keep prices from softening
as much as they otherwise would have," Kontos says.

No matter how much prices are raised by Sandy, at least the
impact will be temporary, says Tom Webb, chief economist for
Manheim Consulting.

And the vehicle impact isn't as bad as from Hurricane Katrina,
which flooded New Orleans and the Gulf Coast in 2005.

At Paragon Honda, Benstock says many buyers are using their
insurance checks as down payments on new vehicles, instead of
buying used. "A lot are finding they can get into a new vehicle
for less" than they expected, he says.

But there are fewer new models on hand.

For instance, Toyota
says it lost up to 4,000 new vehicles awaiting shipments to
dealers.